Department of Aviation concessions management unit - August 2016

We undertook this audit because terminal concessions are a significant source of airport revenue, and the department relies on concessionaires' self-reported gross receipts to calculate amounts due for rent, which carries inherent risks.

We found:

The airport has designed effective controls over financial reporting, and the controls seem to be working as intended

The concessions management unit implemented best practices in four of five broad areas identified in industry literature

The airport's compliance team made unscheduled visits and used concession observation forms to document periodic inspections, consistent with best practice

Due to understaffing, the unit conducted no inspections between April and August 2015 and performed no open and closed assessments during 2015 to asses whether concessionaires were complying with approved hours of operation

The unit did not, at the time of our audit, assess compliance with approved products or prices—we noted prices that appeared to exceed the standard of street plus 10% in 12 of 22 items reviewed

Our recommendations focus on improving the recordkeeping and ensuring that files contain accurate, up-to-date, retrievable information, as well as ensuring that the concessions management unit has the resources necessary to monitor concessionaires' compliance with lease agreement terms.